MUMBAI: Lenders of Kingfisher Airlines have finally decided to proceed with legal action against the company to recover their dues as they seem to run out of patience.

Lenders led by State Bank of India, who met at Trident hotel in south Mumbai, have also formed a core group which will look at possibilities of fast track recovery of their dues and ensure that lenders recover maximum amount of dues through a coordinated effort. The core group will comprise of members from SBI, Bank of India, Punjab National Bank and IDBI Bank.

Shyamal Acharya, deputy managing director of SBI told media persons waiting outside the conference room at Trident, ""The consortium has given KFA enough time to come up with something concrete. There is nothing new or concrete in what KFA has come up with. Banks will send recall notices to KFA""

Bankers have lent Rs 7500 crore to Vijay Mallya promoted Kingfisher Airlines, whose flying licence has been suspended since october last year due to non payment of dues to oil companies and airport authorities. This apart the company owes salaries to its employees and has not paid its monthly dues to banks since October of 2011. Most lenders have classified the loan as bad loan or non performing asset.

Monday's meeting was split into two parts, in the first half the lenders and senior KFA officials including its CEO Sanjay Agarwal was present wherein they proposed the future course of action to revive the company. Senior bank officials said that the company requested bankers to provide guarantees and loan to restart operations

In the second half, the KFA officials walked out of meeting following which the crucial decision to take action against KFA was taken. Lenders have decided to seek approval from their respective management legal action that they would prefer to take on KFA.

Even as lenders plans to take legal action against the company, they do not have adequate collateral. The Goa Villa and the Kingfisher House located in Mumbai is plegded with banks as security. This apart, Mallya has also pledge some shares of UB Holding with banks. However Shyamal Acharya appeared optimistic as he said, ""All guarantees will be added up to more than what KFA owes banks""

The exposure of banks to the troubled carrier runs into Rs 6,360 crore. Unpaid interest and compounded interest take it to over Rs 7,500 crore.

SBI, the leader of the consortium of lenders, has the maximum exposure with Rs 1,600 crore, followed by Punjab National Bank with Rs 800 crore, IDBI Bank Rs 800 crore, Bank of India Rs 650 crore and Bank of Baroda Rs 550 crore.

Kingfisher has been grounded since October 1 last after a labour unrest due to non-payment of salaries which have not been paid since last May.

Banks were hopeful that some money would flow into the airline after Mallya sealed Rs 11,100 crore Diageo deal by selling majority stake in his liquor business United Spirits. Mallya had, however, said these are two different companies.

The bankers were also banking on some equity infusion into the airline by a foreign player following the enabling regulatory environment, but the airline has not been able to find an investor so far.

Since Januray 2012, the airline has not been servicing the loan.

It is clear that banks will have take deeper cuts as the airline has not given practically anything in quarantees. The airline has pledged the Kingfisher Villa in Goa and the Kingfisher House in Mumbai, which may at best fetch Rs 300 crore to the lenders apart from some personal guarantee by Mallya.